Demoulas seizes the day (VIDEO)

Founder's son still Market Basket CEO; board abandons vote

ANDOVER -- Market Basket CEO Arthur T. Demoulas will remain the head of the grocery chain after directors took no action on removing him from the position Thursday.

Supporters of Demoulas, numbering in the hundreds, lined a street leading up to the Wyndham Hotel Thursday morning and many stayed throughout the day, even as temperatures hit 90 degrees and thunderstorms threatened.

After the end of a 12-plus-hour meeting, Demoulas left the boardroom, walked into a separate room to meet with company executives, and then was driven outside to meet supporters who stood outside all day for him.

"I'll never forget you," he shouted to a crowd numbering in the dozens, after a few employees picked him up to sit on their shoulders. "You're the best. I never want to leave you."

In a statement released through the company, Demoulas said he was "pleased" with the result and hoped to work "constructively" with the board.

The crowd included employees and other supporters in homemade T-shirts or dressed up in shirts and ties, with printed signs with "Save Market Basket" and hand-written signs with messages like "Artie is out, I'm out."

Supporters, who chanted "Artie T" when the CEO began shaking hands, said they were relieved.

"You've never met a family like this," said Richard Fichera, a 33-year employee from Danville, N.

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A 14-year employee, Krystal Gauthier of Plaistow, N.H., waited nervously all day for word of who her boss would be.

"It's just such a relief, honestly," she said. "He does so much for so many people. It's just been days of anxiety for all of us."

In the last week, word of Demoulas' potential ouster stirred cries of support from employees and other backers. Demoulas has been credited by supporters with growing the company, keeping low prices for customers, and being generous to employees and community organizations.

Supporters of Market Basket CEO Arthur T. Demoulas rally for him outside the Wyndham Hotel in Andover, where the board of directors discussed his future Thursday. Holding a sign at center is Cheri Nolan, a close friend of Arthur T. Demoulas and general manager of Indian Ridge Country Club in Andover. SUN/David H. Brow

Support for Demoulas was overwhelming at Market Basket stores and online, where a petition gained more than 44,000 signatures and a Facebook page "Save Market Basket" got more than 11,000 "likes."

But despite a successful run for the 71-store chain, three of the company's nine family shareholders sued in June, alleging Demoulas made improper business deals with companies run by his wife and brothers-in-law and withheld information from board members.

The faction of the Demoulas family looking to oust the CEO is led by Arthur S. Demoulas, the cousin of the company head. Each side of the family controls two board seats, with the remaining three independent.

Arthur S. is a board member, but Arthur T. is not.

Market Basket supporters Arthur T. Demoulas walk the grounds at the Wyndham Hotel in Andover where the board of directors held its court-ordered meeting Thursday.
SUN/David H. Brow

The seven-member board met behind closed doors at the Wyndham hotel Thursday. There had been enough support on the board for Demoulas' ouster that last week the CEO called it "a predetermined assault."

The Market Basket crowd was large enough that Andover police had to monitor traffic entering Old River Road and restricted access to the hotel. Some officers stopped people from entering the hotel without a room key, and at least a few officers were stationed outside the hotel boardroom throughout the day.

"It's a big thing for a lot of us to be here," said warehouse worker Brad Miller of Lowell. He and others had clocked out early in the morning and were there on their own time to show support, he said.

Market Basket CEO Arthur T. Demoulas arrives to a rock-star-like welcome by employees and supporters at the Wyndham Hotel in Andover, where the board of directors met all day Thursday to discuss his possible ouster. He remains CEO, as the board did not vote on his removal. See video for this story at lowellsun.com. SUN/David H. Brow

Another warehouse worker, Keith Texeira, said he showed up not only for the CEO but also for all employees who've benefited under his tenure.

"He's the last person I want to see go," the Lowell resident said. "I love what Market Basket is and I do not want to see it sell out like that."

Employees said they came to Andover by the busload from stores like Londonderry, N.H., and Nashua. One employee told another she wasn't worried about having her car towed -- something police officers were warning about -- because showing up still would have been worth it.

Arthur T. Demoulas' four children, along with other family and supporters, spent much of the day in the hotel lobby awaiting word of a vote. Demoulas took trips between the boardroom and a room his office had reserved for the day, and later in the afternoon paced outside the boardroom while he occasionally stopped by well-wishers.

Outside, at least half a dozen trucks from Market Basket's warehouse lined up along a nearby road in the morning, and a few drove by on adjacent Interstate 93 to sound their horns while driving by.

By early evening, some supporters who were outside all day said they sneaked by police by turning their Market Basket shirts inside out to hide the reason they were there, and then walking through the woods.

"It's the least we can do for someone who's done so much," one said.

Employees have said this week they are worried the company's profit-sharing plan, in place since Arthur T.'s father, Telemachus Demoulas, started it in 1963, could be ended. It has provided 15 percent to 20 percent of an employee's pay annually, with the funds kept in an account and paid to the employee upon retirement.

The profit-sharing fund has more than $550 million, according to the company. Market Basket added $43 million to the fund last year.

The shareholders who sued last month laid out their complaints, citing business decisions and comments he made at board meetings from the time he took office in 2008 until recent months.

"My management style," Demoulas was quoted from a meeting transcript from 2009, "is not to come back to this board to request and ask for permission. I'm going to do it."

In another instance last August, Demoulas spoke about what opposing shareholders called his "dictatorial" management philosophy.

"I'm running this company with the philosophy, very strong philosophy, there's only one boss in the company," he said. "There's not two. There's not three. There's not five. There's only one boss in the company... I'll come to this board and tell you the direction that we're going, that we should be going."

The company came to the defense of Demoulas, saying the quotes were taken out of context and that he is "clearly respectful" of the board "99.9 percent of the time."

Other complaints revolve around deals for planned stores and capital expenses.

Three locations where Market Basket plans to open stores -- in Plainville, Plymouth and Revere -- each are locations owned by a real-estate development company, High Rock, that is owned by Demoulas' wife. Demoulas also spends "enormous sums" of money on capital projects, a "substantial portion" of which will go to RMD, a company owned by his brothers-in-law, according to the court complaint.

A 2011 report by a retired Appeals Court judge hired by the board of directors that found those business dealings with family-run businesses not to be a breach of his fiduciary duty.

In another case, the shareholders who sued Demoulas said he and two other trustees violated terms of the company's employee profit-sharing plan by making two investments in 2008 without the board's approval. The investments, in Freddie Mac and Fannie Mae, ended up losing $46 million during the recession.

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